The reorganisation suggests reducing council numbers by mergers using existing boundaries.

Opposition AMs have said they are concerned about the potential costs and loss of local identity in some areas.

The report, by former NHS Wales chief executive Paul Williams, considers how many areas of public services can be improved and made more accountable.

Attention is focused on the recommendations for local authorities, last reorganised two decades ago.

Previous council reorganisations in Wales

In 1974, eight counties and 37 districts were created in Wales

In 1996 this was replaced by the current 22 unitary authorities

The report recommends the new councils should be within current health board and police force areas and also not cross the geographical areas governing eligibility for EU aid.

The report said change must be implemented "quickly and decisively".

"We have reflected very carefully on our findings and conclusions on this issue. We are well aware that what we propose will incur costs, and will be disruptive and controversial - but we are convinced that doing nothing would be worse," it added.

The report has concluded, as a minimum, the following local authorities should merge:

Isle of Anglesey and Gwynedd

Conwy and Denbighshire

Flintshire and Wrexham

Ceredigion and Pembrokeshire

Neath Port Talbot and Bridgend

Rhondda Cynon Taf and Merthyr Tydfil

Cardiff and the Vale of Glamorgan

Blaenau Gwent, Caerphilly and Torfaen

Monmouthshire and Newport

With Carmarthenshire, Powys and Swansea unchanged, this would yield 12 authorities.

Using these mergers as building blocks, the report said, there were other viable possibilities resulting in 11 or 10 local authorities.

Swansea could merge with Neath Port Talbot and Bridgend to form a single local authority, giving 11 local authorities in total.

Analysis

By Tomos LivingstoneBBC Wales political correspondent

One word sticks out amongst the tens of thousands that make up the Williams report - urgent.

It is a thorough examination of what has gone wrong over years and there is no time to lose to make changes.

The main conclusion is that we have far too many local councils.

The sole arguments remaining are whether Swansea, Neath Port Talbot and Bridgend should become one super-council, and whether the old Dyfed should be reconstituted.

It is an ambitious timetable for the Welsh government.

There may be some scepticism about the potential costs, and it is always tricky to explain how different structures might lead to better services. But fewer politicians? That will be the easiest part of the package to sell to the public.

It is also an option to merge Carmarthenshire with Ceredigion and Pembrokeshire to form a single local authority, again yielding 11 local authorities in total.

The cost of merging Welsh councils could be met from savings made within as little as 18 months to two-and-a-half years, the Williams report predicted.

While it does not put a figure on the costing, the report said: "If merger is implemented properly and with pace, it can protect front-line services and jobs sustainably and effectively. That alone makes a compelling case for the changes we propose."

The report also said fire and ambulance services should work more closely together.

The Welsh Local Government Association said in a statement: "We live in a time of unprecedented cuts in public spending but also know that demands on public services have never been greater.

"Government must be clear whether a reorganisation will assist in alleviating these pressures or exacerbate them."

It called for clarity on timescales. staffing implications and how it would be paid for.

'Change inevitable'

Responding to the report, First Minister Carwyn Jones said: "This report addresses many issues that are critical at a time when the need for public services is outstripping the resources available to provide them. I have always been clear that the status quo is not an option.

"Change is inevitable and essential so that our public services can become more efficient, effective, accessible and responsive."

Welsh Conservative leader Andrew RT Davies said: "From a local perspective it is almost inevitable now that the Vale of Glamorgan will be amalgamated with Cardiff, as is the case with health in the area. However, it should be remembered that big is not always beautiful.

Radical change is needed for public services to survive in a viable and sustainable formSir Paul Williams, Report author

"The whole process should be underpinned by a debate about what services we as residents expect local authorities to deliver. Ultimately it would be a sad day for democracy in Wales if any systemic reform leads communities to feel greater disconnect with local authorities."

Peter Black AM, Welsh Liberal Democrat spokesman for local government, said: "The next local government reorganisation must be for keeps. We cannot afford to be considering ripping it up and starting again in 15 or 20 years time."

"I'm prepared to support re-organisation if we get it right. That means having councils which are representative, with a fair voting system such as the single transferable vote, so that the outcome of elections are reflected in the way councils are elected."

Plaid Cymru AM Rhodri Glyn Thomas said the government needed to take "direct" action.

"The weight of evidence presented to the Williams Commission shows that if the people of Wales are going to get the services they need and deserve then there has to be a radical improvement in the way public services are delivered," he said.